Organisations that process payments naturally require high levels of security to handle confidential and or sensitive financial information, such as payroll, etc., and rely on their systems to be safe and robust. It can be challenging for businesses to find the right system that safeguards their data, reduces their risk exposure and data vulnerability.
With reports suggesting that 25% of UK businesses were hit by a cyber attack in the last twelve months, aligned with the growing sophistication of cybercrime, there has never been a more important time to take stock of your payment security arrangements. It’s crucial to ensure they are resilient enough to deal with our constantly changing cybersecurity environment.
Knowing how to prevent and mitigate common payment security risks is key to strengthening internal systems to ensure information is protected, brand reputation is safeguarded, and operations are shielded. Businesses need this level of consistency and security so that they can continue to safely grow and evolve.
In this article, we identify five common payment security risks and essential actions your business can take to prevent them from occurring.
Contents
- What is a payment security risk?
- Why is it important to restrict payment security risks?
- Five common payment security risks and how to prevent them.
- Strong payment processing services with Interbacs.
What is a payment security risk?
A payment security risk is one that generates a threat to your financial systems and the security of financial transactions, such as an incident of fraud, a data breach or financial loss.
One example would be if insecure payment gateways are involved in your financial transaction pathway. Such gateways create a threat vulnerability by which a malicious operator could access confidential information or take control of your financial flows for their own profit or deliberate detriment to your cash flow.
A data breach could be an opportunity for cybercriminals to take control of sensitive customer data, like bank details or personal information. Organisations may find it difficult to continue normal operations until data is returned to full protection.
Organisations that process payments might also be exposed to risk through regulatory non-compliance. This means compliance standards are not consistently enforced, exposing the business to vulnerability or the potential for penalties to be imposed.
Why is it important to restrict payment security risks?
It’s critical for businesses that process payments to restrict or try to eliminate payment security risks so that they don’t suffer damage, such as:
Increased financial loss
A data breach can create substantial financial losses due to the cost of investigation, legal fees or customer compensation running up into millions of pounds. Additionally, a cyber incident or data loss can reduce your ability to function at previous levels, leading to a decline in income.
Reduced customer trust
There is a high expectation on the part of many customers that their personal information is kept safe by the businesses they share this with. If there is an issue with their data, customers will likely lose trust and seek their required service elsewhere.
Enlarged fines and legal penalties
Failing to meet regulatory requirements, such as General Data Protection Regulation (GDPR), could result in a fine or enforcement action from a regulatory authority such as the Information Commissioner's Office (ICO).
Extended operational interruption
If a cyber incident or data breach takes place, there may be a forced period of downtime and inaction within your enterprise. This could mean a loss of new business, decreased sales or other burdensome impacts on financial performance.
Five common payment security risks and how to prevent them
Recognising payment security risks, understanding their complexities and increasing your knowledge about preventative measures will create a stronger response to risk in your organisation. These actions will also help you create more robust systems and protocols, helping you safeguard your business against potential attacks.
Addressing the following five common payment security risks could future-proof your business:
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Human error
Studies show that some human error is likely to exist within payment processing, with evidence pointing to a human element involved in 74% of all breaches. In order to reduce this risk, automation within payment processing solutions increases accuracy and data protection.
Any organisation processing payments also needs to ensure that they closely align with the Know Your Customer (KYC) guidance and run validation checks on customer information.
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Missing payments
Without an automated system, it can be extremely difficult to identify missing or delayed payments, particularly if your business is processing large payment volumes and accessing Bacs action reports manually. Effective automated payment processing solutions often feature missing or cancelled payment notifications, with predetermined actions configured to allow you to resolve any issues with ease.
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Fraud vulnerability
Limiting the chance of fraudulent activity occurring within payment processing is vital for businesses that want to ensure the highest possible levels of security. Permission-based processing only allows approved users to access sensitive data, increasing the security of confidential information.
Payment processing services, such as those provided by Interbacs, offer a segregation of duty system, MFA as standard, and deeper approval controls. Segregation of duty splits tasks between users so that no single person has complete control over a payment, decreasing the risk of a threat or fraudulent incident.
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Indemnity risk
All Direct Debit customers have the right to a full reimbursement of all monies that have been deemed to be collected erroneously or fraudulently or to have been proven to involve data mishandling. It’s essential for payment processing organisations to have secure KYC and validation checks to prevent these situations from developing and protect themselves from indemnities.
Working with an experienced and effective Bacs specialist, like Interbacs, helps to mitigate any of these scenarios from taking place. If you’d like to know more about payment security, read our Bacs compliance and security explained: the complete business guide.
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External threats
There is unfortunately no magic solution that completely eliminates the possibility of an external threat to your business. Using a robust, compliant and secure provider, as Interbacs has been proven to be, will help negate these threats.
At Interbacs, we have ISO 27001, 90001, Cyber Essentials and Cyber Essentials Plus certifications, alongside the experience to run rigorous penetration testing. All of these elements ensure the businesses we work with have increased levels of protection, providing reassuring peace of mind.
Strong payment processing with Interbacs
Interbacs was one of the first Bacs-approved facilities Management providers and Bacs-approved bureaus in the UK. The regulations that define a Bacs-approved bureau are extremely rigorous, with the bureau consistently meeting the highest standards of compliance.
If you’re looking for a Bacs payment services provider that collaborates effectively with clients, then Interbacs is the service for you. If you choose to work with us, you’ll be assigned a fully Bacs-trained team member who will guide you through the entire process.
With a host of benefits, such as free consultations, Direct Debit training and expert advice, you can make the most of this flexible and productive service.
Our friendly team is always on hand to listen to your requirements and deliver efficient, sensible solutions. You can also explore our Solution Finder to discover payment management services that can transform your business.
Contact our team today to discuss how streamlining your payment processes can reduce administrative burdens and free up time to achieve your business goals.
